Mastercard Extends New Requirements Deadline for Recurring Transactions

Article Payments & Treasury Solutions
Mastercard Recurring Transactions


UPDATE from Mastercard:

Mastercard is modifying the requirements that apply to merchants that use a subscription/recurring billing model and took effect 22 September 2022. Specifically, the requirement to provide an electronic receipt after each billing will now only apply to merchants that are identified for at least four months in the Acquirer Chargeback Monitoring Program (ACMP). In addition, all requirements will now only apply to non-profit and charity merchants that are identified for at least four months in the ACMP. Read the complete announcement.

CampusGuard Treasury Solutions strives to keep you informed about upcoming changes in payment regulations and requirements that could affect our clients. The effective date for one of those changes is quickly approaching.

Mastercard is reclassifying recurring donations received by nonprofits as subscriptions, effective March 21, 2023.

On this date, recurring donations made with a Mastercard will be classified as “subscription services.” The changes will impact foundations/philanthropy/development offices, radio and TV fundraisers, athletic fundraisers, or any entity that stores a Mastercard, token, or full card number that manually or automatically charges the cardholder on a recurring basis.

In part, the new regulations require:

  • A confirmation email at the time of enrollment that includes the terms of the subscription and instructions on how to cancel the subscription.
  • An emailed receipt after every successful billing that includes instructions on how to cancel the subscription.
  • Provision of an online cancellation method.
  • Recurring payment plans that bill less frequently than every six months must provide a notification with the terms of the subscription and instructions on how to cancel the subscription. This notification must be provided no later than seven days and no more than 30 days prior to the billing date.

The original effective date of this requirement was September 22, 2022, however Mastercard recently extended the effective date to March 21, 2023. Since many in the nonprofit sector were largely unaware of the requirement changes, this extension gives your institution additional time to assess your solutions and service providers in this area and prepare.

A gift of time from Mastercard. Yippee!!

No…it’s not exactly the type of gift we’d all like to receive from one of the largest card brands in the world. Since the original effective date seems to have been a well-kept secret, the delayed effective date affords your institution some additional time to prepare.

I encourage you to reach out to your card processor for more information, and to check out the Mastercard transaction processing rules. The Nonprofit Alliance, an organization that provides services to nonprofits, has posted insightful information about the Mastercard requirements.

If you are unsure as to what questions to ask your processor or third-party service providers in preparing for this impending change, please reach out to us.


About the Author
Ruth Harpool

Ruth Harpool


Treasury Solutions Advisor

Ruth provides consulting in the areas of Treasury Operations, Payments, and Payments Risk management. She has over 30 years of experience in banking services, banking operations, not-for-profit treasury cash management, and payments management operational leadership. Formerly, Ruth was the Managing Director of Treasury Operations at Indiana University.